DUBLIN SUMMIT: Major prepares for final conflict

THE SHOWDOWN

As John Major headed for Dublin for probably his last showdown at a European summit, Tony Blair, the Labour leader, was already there, forging ties and preparing to take his seat on the European stage.

Today Mr Major is expected to clash with his partners during discussions on a draft treaty on European reform. He is expected to oppose possible changes to the treaty, including suggestions that border controls be dropped and qualified majority voting increased. He will also come under new pressure on the single currency.

Last night, as negotiations on the "stability pact" went late into the night, European finance ministers were expected to reach a compromise in time for today's full summit meeting. Germany appeared isolated as it continued to insist on the severest of rules and fines for countries that disobey single-currency rules after the launch. However, diplomats said sufficient political will existed on all sides to ensure a last-minute deal on the pact was done.

Failure to finalise rules for the stability pact would increase doubts about whether Europe's leadership can maintain the drive towards monetary union. It would also cause turmoil in the markets.

Also in Dublin today the design of euro banknotes will be unveiled by the European Monetary Institute, the European central-bank-in-waiting, a move intended to boost the single-currency project and capture the imagination of the public.

While clashes between Mr Major and other leaders seem inevitable, Britain's partners know it is more likely to be Mr Blair than Mr Major who will decide whether to take Britain into the single currency and who will be signing the EU reform treaty on behalf of Britain. Signing is due at the Amsterdam summit in June, after the British election. The decision on whether to join the first wave of EMU must be taken by early 1998.

In the first real sign that Mr Blair is launching shadow negotiations with Britain's European partners, he flew to Dublin for a meeting of Socialist leaders, the first time he has attended such a gathering since becoming Labour leader.

He also held talks last night with Wim Kok, Prime Minister of the Netherlands, who will become a key figure in treaty-reform talks when the Netherlands takes over the EU presidency next month. He is believed to have questioned Mr Blair on Labour's position on further integration. European leaders have fudged the most controversial reform, such as a reduction in the national veto, because they know Mr Major would say "no" before the election.

Mr Blair, determined not to be seen to be giving in to European demands, and thereby playing into Conservative hands, was expected last night to reaffirm that Labour would, like Mr Major, oppose the most integrationist plans.